Quantifying the impact of sharing resources in a collaborative warehouse

Abstract

Collaboration in warehousing has the potential to decrease warehousing costs and increase supply chain efficiency and is therefore popular in practice. However, there is little literature quantifying the benefits of warehouse collaboration. In this paper, we study the impact of collaboration on two main internal resources of the warehouse; order pickers and dock doors. The setting we consider is relevant to multi-user warehouses, where the owner provides facilities and services to multiple clients depending on their needs. We investigate the impact of sharing the resources among the clients of such a warehouse. We present an Integer Linear Programming (ILP) formulation, which aims at planning the order picking and shipping process while minimizing the total tardiness of shipping trucks. We use this ILP to solve the non-collaborative and collaborative case and evaluate the performance improvement resulting from the collaboration, based on operational data from a retailer. We perform computational experiments under varying warehouse configurations to investigate under what circumstances collaboration leads to the highest benefit. We find that collaboration has a significant impact on decreasing the tardiness of trucks, and the benefits mostly come from sharing the pickers rather than sharing the dock doors. We further find that the maximum benefit of collaboration is obtained at the medium-level of resource utilization. Even at low levels of utilization of a particular resource, benefits can be obtained by collaborating on complementary resources.